Responsible Supply Chain
CSR Procurement Initiatives
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Background of Initiatives
Commitment to Improving Labor Conditions (human rights), Safety & Health, Environment, and Ethics in the Supply Chain
Companies have to take social responsibility not only for their own products but also for improving labor conditions (human rights), health and safety, the environment, and ethics in the supply chain*1 used to deliver products to customers. In line with this recognition, Konica Minolta promotes CSR procurement that pursues these kinds of improvements together with its business partners who supply and produce materials such as raw materials, parts and components, as well as Group production sites, with the aim of establishing a sustainable society in which human rights are respected.
In recent years, several laws related to human rights protection, such as the Uyghur Forced Labor Prevention Act (USA) and the Act on Corporate Due Diligence Obligations in Supply Chains (Germany), have been enacted. These laws demand that companies strengthen their human rights efforts. In response to these social demands, the RBA*2 has updated its code of conduct and various systems. As an RBA member, Konica Minolta will utilize the RBA’s framework to address these social issues.
- *1
- Supply chain: The series of activities involved in delivering a product or service to a customer, ranging from procurement and production to distribution and sales.
- *2
- Responsible Business Alliance (RBA): Organization that promotes CSR in the supply chain.
CSR Procurement Promotion Program
Konica Minolta is engaged in a program to promote CSR procurement by calling for CSR activities, CSR assessments, and audits, as well as improvement support.
Konica Minolta is rolling out a four-step CSR procurement promotion program to solve labor (human rights), safety and health, environment, and ethics related issues in the supply chain.
First, we request that suppliers comply with our procurement policy and Supply Chain Code of Conduct. In the case of upstream suppliers, we ask that their direct suppliers make this request.
Next, major suppliers that are important to Konica Minolta’s business, which are identified by their transaction volume (top 80% of Group procurement value), handling of critical parts, and substitutability, and other aspects of Group continuity, and in terms of ESG, such as geopolitical risk, human rights risk, and environmental risk., are asked to complete the RBA Self-Assessment Questionnaire (SAQ) to conduct a CSR assessment to confirm the extent of their implementation of the Konica Minolta Supply Chain Code of Conduct. If the assessment results are off target, we ask them to make improvements.
In addition, we conduct CSR audits on suppliers that are critically important to our business, or on suppliers that failed to achieve their targets even after making improvements. Konica Minolta then supports making improvements to issues identified through CSR assessments and audits. Konica Minolta is committed to this program to promote CSR procurement so as to ultimately empower its suppliers to implement CSR activities voluntarily. Please note that Konica Minolta sometimes ends business with suppliers who show no prospects for improvement despite the support provided.
Konica Minolta’s CSR Procurement Promotion Program
Assessment rank | Assessment result | Explanation |
---|---|---|
Rank A Low risk |
100% - 85% | Almost completely satisfies social demands |
Rank B Medium risk |
85% - 65% | Some issues need to be improved, but can be improved voluntarily |
Rank C High risk |
Less than 65% | Issues need to be improved, and immediate improvement is required along with an improvement plan. If improvement is not expected even after providing support, a CSR audit is requested. |
Framework for Initiatives
STEP 1 - CSR Activity Request
The Company has drawn up the Konica Minolta procurement policy, the Konica Minolta Supply Chain Code of Conduct, and the Konica Minolta Responsible Minerals Policy Statement to ensure that its suppliers understand and promote the CSR procurement policies and standards that Konica Minolta requires, and all suppliers are requested to comply with them and confirm so in writing. The Company also requests that its upstream suppliers submit requests through their direct suppliers.
The frequency of requests starts at the commencement of business for new suppliers and once every three years for existing suppliers, and the response rate for the most recent request made in fiscal 2021 was 100%. The next request is scheduled for fiscal 2024.
In fiscal 2024, we plan to expand the scope to include indirect material suppliers, identify industries with high human rights risks, and request compliance.
Targets and Results
KPI | Results |
Targets | |||||
---|---|---|---|---|---|---|---|
FY 2020 |
FY 2021 |
FY 2022 |
FY 2023 |
FY 2023 |
FY 2024 |
FY 2025 |
|
Percentage of suppliers requested to take CSR measures*1 | - | 100% | - | - | 100% of suppliers asked to take CSR measures during the medium-term plan’s period (FY2023-2025) (100% implementation planned for FY2024) |
- *1
- Requests to suppliers were made for each of the two medium-term plan’s periods: FY2020-FY2022 and FY2023-FY2025.
STEP 2 - CSR Assessments Using a Self-Assessment Questionnaire
Since fiscal 2009, Konica Minolta has been conducting CSR assessments using the RBA self-assessment questionnaire since at all Group production sites and major suppliers to assess the level of implementation of the Konica Minolta Supply Chain Code of Conduct.
The CSR assessment evaluates site initiatives to address social issues such as labor (human rights) protection, health and safety, ethics, as well as environmental issues such as minimizing environmental impact. Konica Minolta classifies the results of the self-assessment questionnaire from rank A to C. The targets for overall scores are rank A for all Group production sites and rank B or higher for all suppliers. Rank C suppliers are considered to be high-risk, and CSR audits are conducted for those suppliers that have not achieved their targets even after implementing improvements. Suppliers who received the rank of C and did not achieve their target rank even after receiving improvement support are considered to be high-risk suppliers and are subject to the CSR audit in STEP 3.
In fiscal 2023, nine production sites within the Konica Minolta Group, and 30 of the 103 companies (84 primary suppliers and 19 secondary suppliers) identified as major suppliers conducted the CSR assessment, with all production sites achieving rank A and all suppliers achieving rank B or higher on their overall score. There were no high-risk suppliers. These assessment results met the target, but scores tended to be low in the areas of labor, the environment, and ethics. Specifically, the declining score in the areas of labor and ethics was due to the establishment of management systems, and in the area of the environment, the decline was due to items related to resource usage, waste, and GHG reduction programs. We have asked suppliers whose assessments have declined to make voluntary improvements.
Results of fiscal 2023 CSR Assessment for Suppliers (percentages for rank on overall and specific components)
Targets and Results
KPI | Results |
Targets | |||||
---|---|---|---|---|---|---|---|
FY 2020 |
FY 2021 |
FY 2022 |
FY 2023 |
FY 2023 |
FY 2024 |
FY 2025 |
|
Number of CSR assessments | 4 Group manufacturing sites, 40 suppliers |
13 Group manufacturing sites, 30 suppliers |
4 Group manufacturing sites, 28 suppliers |
9 Group manufacturing sites, 30 major suppliers |
CSR assessments implemented at Group manufacturing sites and major suppliers during the medium-term plan’s period (FY2023–2025) | ||
CSR assessment implementation rate (cumulative)*1 | - | - | - | 31% | 30% | ||
Number of major suppliers*2 | - | - | - | 103 | - | 60% | 100% |
- *1
- Figures are cumulative for the medium-term plan (FY2023 - FY2025) and are calculated as the number of CSR third-party audits implemented divided by the number of sites planned for implementation (Group production sites + major suppliers)
- *2
- The number of major suppliers is reviewed annually.
Konica Minolta is also working to ensure that indirect material suppliers, critical partners essential to its business operations, understand the RBA's requirements. In fiscal 2023, we identified on-site contractors and temporary staffing agencies at major manufacturing sites as important indirect material suppliers and conducted self-assessment questionnaires. The risk assessment results showed a 100% response rate, and none of the indirect material suppliers were rated “high risk.”
Type of indirect material supplier | No. of companies assessed for risk |
Result | |
---|---|---|---|
On-site contractors | Cafeteria | 3 | All low risk |
Security | 2 | All low risk | |
Maintenance | 1 | All low risk | |
Cleaning | 2 | All low risk | |
Other (logistics, waste disposal, etc.) | 4 | All low risk | |
Temporary staffing/Contracting | 8 | All low risk | |
Logistics/Warehouse operators | 3 | All low risk | |
Other | 5 | All low risk |
STEP 3 - CSR Audits
Suppliers that are identified as high risk in STEP 2 are subject to CSR audits. CSR audits consist of the Konica Minolta CSR Audit*1 conducted by Konica Minolta employees and the VAP Audit*2 conducted by third-party auditing organizations certified by the RBA.
- *1
- Konica Minolta CSR Audits are performed by Konica Minolta auditors using RBA auditing standards.
- *2
- RBA third-party audits (VAP audits): A third-party RBA-accredited auditing organization that verifies compliance with the RBA Code of Conduct based on auditing standards, identifies areas in need of improvement, and encourages corrective action. RBA is one of the most trusted third-party CSR audits in the world.
As mentioned above, no suppliers that were identified as “high risk” in fiscal 2023, so no audits were conducted. Therefore, there were no suppliers with whom transactions were terminated.
Targets and Results
KPI | Results |
Targets | |||||
---|---|---|---|---|---|---|---|
FY 2020 |
FY 2021 |
FY 2022 |
FY 2023 |
FY 2023 |
FY 2024 |
FY 2025 |
|
Number of CSR third-party audits (RBA-VAP) | One supplier | Two Group manufacturing sites, one supplier | 3 Group manufacturing sites, 4 suppliers | 3 Group manufacturing sites, two suppliers | 3 Group manufacturing sites, two suppliers | - | - |
Rate of CSR third-party audit implementation | - | - | - | 100% | 100% | 3 Group manufacturing sites, 4 suppliers | 3 Group manufacturing sites, 3 suppliers |
Step 4 - Supplier Support
To build internal stakeholder and supplier capacity, Konica Minolta provides training and support for corrective action based on the results of the CSR assessments and audits. The training is designed to enable participants to understand the respect for human rights required by customers and society, societal demand for CSR procurement, legal and regulatory trends, the RBA Code of Conduct, and their relationship to business, so that they can make CSR procurement activities their own and actively take part. In fiscal 2023, we will continue to provide education to internal stakeholders such as the human resources, procurement, and environment departments of our manufacturing companies, as well as to factories contracted to produce MFP units. In its support of corrective action, Konica Minolta explains the objective and assessment content of RBA to suppliers who do not properly understand the questionnaire’s content at the time of the CSR assessment and provide advice on the required documents and initiatives.
Konica Minolta also assisted the Dong Guan Konka Mould Plastic Co., Ltd. in China, which conducts CSR audits, by training its internal auditors to help it build a system that enables it to voluntarily conduct internal audits make continuous improvements. In addition, we share examples of improvements made at Konica Minolta with the plants of MFP contract manufacturers that have undergone VAP audits and we support their corrective actions.
Internal education at Konica Minolta Business Technologies (DONGGUAN) Co., Ltd.
Procurement Collaboration System
Promoting procurement collaboration to increase customer satisfaction
Seeking to increase customer satisfaction, the Business Technologies Business promotes a Procurement Collaboration System in which suppliers and Konica Minolta work together in pursuit of improvements. In this initiative, the Group shares challenges through dialogue with and visits to suppliers, makes proposals needed for their resolution, and provides concrete support aimed at comprehensive improvements in terms of quality, delivery, productivity, the environment, and business management. Suppliers also point out issues to Konica Minolta, which serves to improve problems in business transactions.
Environmental Collaboration Aimed at Strengthening the Management of Chemical Substances Included in the Supply Chain
Konica Minolta has implemented environmental collaboration with suppliers to reduce environmental risk as a procurement collaboration system in the area of the environment. This initiative creates solid partnerships through on-site assessments and educational support for suppliers in order to strengthen management of chemical substances included in the supply chain.
In fiscal 2023, Konica Minolta went directly to the manufacturing sites of 66 suppliers in and outside Japan and conducted on-site assessments, working with suppliers to strengthen the chemical substances management system. In addition, the Company confirms activities in areas such as labor, health and safety, the environment, and ethics at its suppliers’ manufacturing sites.
In addition, Konica Minolta has established an educational system focused on laws and regulations as well as on-site management that it uses to train suppliers’ internal assessors in an effort to support the independent management of chemical substances on the part of suppliers. Education on changing trends and Konica Minolta’s initiatives was added to CSR procurement initiatives starting in fiscal 2018. In fiscal 2023, Konica Minolta conducted approximately 139 internal assessments.
Holding Suppliers’ Meetings
Konica Minolta holds annual suppliers’ meetings as part of its procurement collaboration system. Previously, these meeting were held in person, but since fiscal 2019, we have changed over to an online format due to COVID-19’s impact and they are now mainly held for suppliers in Japan, China, and ASEAN.
In fiscal 2023, a total of 284 suppliers (484 people) participated, representing a majority of our suppliers. At the meeting, the Konica Minolta’s procurement policy was explained, requests were made for cooperation in CSR procurement, procurement results and plans were reported, and goals and challenges were shared.
Additionally, Konica Minolta takes the opportunity of the suppliers’ meeting to commend suppliers. The purpose of commending suppliers with excellent records in terms of quality, delivery, productivity, and the environment is to encourage all suppliers to undertake further improvement initiatives.
Suppliers’ meeting in China
CSR Audits (Societal/Customer Requests)
While there were no suppliers that were required to undergo CSR audits under the CSR procurement promotion program, we have conducted CSR audits at our own production sites in the Business Technologies Business and at some of our suppliers in response to societal and customer requests.
In fiscal 2023, RBA VAP audits were conducted at three of our own production sites and two of our suppliers.
CSR audit sites in 2023
- Konica Minolta Business Technologies (Wuxi) Co., Ltd.
- Konica Minolta Business Technologies (Dongguan) Co., Ltd.
- Konica Minolta Business Technologies (Malaysia) Sdn. Bhd.
- Two contract manufactures of MFPs/printing equipment.
In particular, Konica Minolta Business Technologies (Dongguan) and Konica Minolta Business Technologies (Malaysia) identified issues including management of working hours and social insurance, but all corrective actions have been completed and the highest Platinum certification was achieved. Other sites have taken corrective action to address the audit findings and have obtained Silver certification or confirmed the absence of priority non-compliances.
RBA VAP audit at Konica Minolta Business Technologies (Malaysia) Sdn. Bhd.
RBA VAP audit at Konica Minolta Business Technologies (Wuxi) Co., Ltd.
RBA VAP audit at Konica Minolta Business Technologies (Dongguan) Co., Ltd.